Kin and Carta downgrades FY expectations, shares tumble

24th Feb 2023 10:23

(Sharecast News) - Digital transformation consultancy Kin and Carta tanked on Friday as it downgraded full-year expectations, citing macro headwinds in the first half.

In an update for the six months to the end of January 2023, the company said it was cutting its expectations "to reflect more cautionary client spending and elongated sales cycles seen across the industry".

For the year to the end of July 2023, it now expects net revenue growth of 8% to 12%, with organic net revenue at constant currency expected to show a low single digit percentage decline from the prior year. This compares to previous guidance for a 15% to 20% increase.

The company said trading in the first half generated net revenue growth of 15% to £99m with similar adjusted operating margins to the comparable period in the previous year.

Like-for-like net revenue was down 6% in total, with a 1% decline in Americas and a 16% fall in Europe, driven by particularly difficult trading conditions in the UK.

Chief executive Kelly Manthey said: "Despite macro headwinds tempering short-term growth across the industry, we remain focused on our long-term strategy that prioritises enterprise clients with high quality, resilient revenue, delivered with higher margin nearshore delivery.

"Our record backlog demonstrates the ongoing demand for our services. The measures that we are currently implementing in the business give me confidence that we are continuing to build a firm platform for future growth. Our ambition for Kin + Carta has not changed."

At 1020 GMT, the shares were down 30% at 130.83p.